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ChromaDex, 5LINX strike $62 million ingredient deal

ChromaDex Corp.® (OTCBB: CDXC), an innovative natural products company that provides proprietary, ingredients and science-based solutions to the dietary supplement, food and beverage, animal health, cosmetic and pharmaceutical industries, announced it has entered into a four-year ingredient supply and brand licensing agreement valued at approximately $62 million, with 5LINX®, one of the largest and fastest-growing direct marketing companies in the world.

5LINX has been granted marketing rights for ChromaDex’s recently launched patented NIAGEN™ Nicotinamide Riboside (NR) for use in dietary supplements exclusively in the network marketing sales channel in the United States, Canada and Philippines. Under the terms of the agreement, 5LINX must purchase from ChromaDex $2.1 million of NIAGEN in 2014, and an aggregate of $46 million of NIAGEN from 2015 through 2017. NIAGEN is the first and only commercially available brand of NR, which is found naturally in trace amounts in milk and other foods and is a more potent, no-flush version of Niacin (vitamin B3). Published research has shown that NR is perhaps the most potent precursor to NAD+ in the mitochondria of animals. NAD+ is arguably the most important cellular co-factor for improvement of mitochondrial performance and energy metabolism.

5LINX has also been granted marketing rights for ChromaDex’s recently launched patented PURENERGY™ for use in dietary supplements, with select exclusively in the network marketing sales channel in the U.S., Canada and Philippines. Under the exclusive network marketing channel agreement, 5LINX must purchase from ChromaDex $520,000 of PURENERGY in 2014 and an aggregate of $14 million of PURENERGY™ from 2015 through 2017. ChromaDex’s PURENERGY caffeine alternative is a patented co-crystal ingredient comprised of caffeine and ChromaDex's pTeroPure® pterostilbene, a potent anti-oxidant found in blueberries. The first human study of PURENERGY demonstrated PURENERGY delivers 30 percent more caffeine, stays in the blood stream longer, and is absorbed more slowly than ordinary caffeine. With PURENERGY, formulators of energy products may have the ability to reduce the total amount of caffeine in their products by as much as 50 percent without sacrificing consumers’ expectations from such products.

“The health and wellness stories behind NIAGEN and PURENERGY make each ingredient ideal candidates for us to launch a suite of wellness products that will accelerate the growth in our new wellness segment,” says Craig Jerabeck, CEO of 5LINX. “We view this deal as an incredible opportunity for 5LINX to be among the first to offer dietary supplements featuring NIAGEN Nicotinamide Riboside and PURENERGY.”

Frank Jaksch, ChromaDex founder and CEO, states “We believe the network marketing channel is ideal for the early development and adoption of NIAGEN and PURENEGY-based health and wellness products. We are impressed with the historical success that Craig and his 5LINX management team have demonstrated in building a long-term sustainable sales and marketing network, and becoming recognized as one of the largest and fastest-growing direct marketing companies in the world.”